A home modification can be an effective way of avoiding a foreclosure and can effectively lower your monthly payments either through a loan extension, lower interest rate, elimination of fees, grace period, or any combination of the available options. When it comes to getting you a loan modification, it usually gets a bit more complicated than it sounds. You have to able to sift through all the scams and illegitimate firms who will try get your money.

Loan modification is so common these days that scam artists have picked up this little trend as well. Following are some of the guidelines for you to avoid any home loan modification scam. You need to be aware of these because even the FBI has issued numerous warning to home buyers to beware of loan modification firms who are not accredited.

1. If the offer sounds too good to be true, it probably is. If a company comes up to you and promises to deliver on a certain interest rate, or a said principle reduction amount without even negotiating with the lender, it probably is a scam.

2. Vile natured companies would come up to scam poor unsuspecting homeowners. Most of the times, the homeowners that fall prey to the scam are the ones that are trying hard and struggling to meet ends meet with their mortgage payments and commitments. Seldom homeowners that are keen on selling their homes may also come under the radar of such scam artists.

3. If you are approached by someone who is asking for you to pay a fee, you should immediately know that there is something fishy in the process. You can almost always get advice and assistance from a US Department of Housing and Urban Development (or HUD)-approved housing counselor. This service is provided to you free of charge and you are in no obligation to pay a fee.

4. You need to be aware of anyone who asks you to pay upfront before even initiating a deal with your lender. If they demand a fee in return for providing you a counseling service or modification of a delinquent loan, they are most probably scamming you.

5. If you have assigned a negotiator for help with your loan modification, you need to make sure that this third party negotiator doesn’t agree on the first proposal that is set by your lender. By the time you loan modification is approved, you’d realize you still are in deep trouble and that you could have had done better than that in the first place.

6. Do not sign a single copy of paper under pressure from anyone. People usually get you into signing or transferring your deed to your house. In no circumstance should you ever sign over the deed to your home or property to anyone.

7. Never make a mortgage payment to anyone other than your mortgage company without their approval. You can never be aware of such malpractices and scams.

Even if you do find a trustworthy company, they usually charge thousands of dollars, and never bring the results you need. If you hire a company, your lender won’t see it urgent because if you have thousands of dollars to shell out on a firm, then you must be able to pay your mortgage. Either that or they make minuscule changes to your loan. The best way to avoid this, is to do your own loan modification. But most homeowners who choose this route don’t research and don’t know the subject too well. They fall in the same trap as when they bought the house.